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Recruiting and Retaining IT Talent

  • ID: 42766
  • Report
  • October 2000
  • 95 pages
  • American Productivity & Quality Center, APQC
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As in any market, when demand exceeds supply, fierce competition ensues and
prices (in this case, salaries) rise. The demand for skilled information technology (IT) professionals has grown steadily over the past five years. The Information Technology Association of America estimates that there are nearly 350,000 more IT jobs than there are qualified people. The competition for skilled IT professionals is intense, and few companies are investing significantly in training new talent. Even if they were, the lag between the time when these professionals are trained and when they are needed would be lengthy. Recruiting and retaining IT staff has become a significant challenge for most companies in America, and the situation does not promise to improve any time soon as the pool of available talent shrinks in the United States. The Chronicle of Higher Education reports a consistent decline in the number of students receiving degrees in engineering and computer science. What is also disturbing is that many of those who do graduate with technical degrees are citizens of countries other than the United States.

A REVOLUTION IN RECRUITING

The ways in which recruiters find people and communicate with them have been
revolutionized since 1995. The Internet has been primarily responsible for this, as it has opened new channels of communication and allowed recruiters (and candidates) to search across geographical, temporal, and organizational bounds without leaving their desks or incurring significant cost. This new technology has arrived just in time to help balance the supply of people and demand. However, an increase in the use of the Internet has brought with it an increase in the computerization of most aspects of our lives and an even greater need for IT professionals. Traditionally, recruiters have reacted to business needs for personnel, delving into large databases seeking people that may be good candidates now or in the future. Recruiters have built these databases over time by combining personal contacts, membership lists in industry-specific associations, and lists of employees in large companies in particular industry segments; by reading trade publications for names and titles; and by extensively using the telephone to introduce themselves to candidates and obtain referrals.

NEW TIMES REQUIRE NEW SKILLS

The speed with which people become aware of new opportunities and change
jobs, the temporary nature of many start-up firms, and constant acquisitions and mergers make maintaining an updated database very difficult. Today’s just-in-time recruiting tools are flexible. Recruiters are under pressure to use these new tools, to work proactively with business leaders to anticipate personnel needs, and to develop new methods to find and track potential candidates. In a tight IT labor market, recruiters must become resourceful in discovering and creating new sources for talent. Recruiters must also have the ability to effectively communicate among candidates, recruiters, and IT managers. They must do this in the language of the business and with an understanding of the corporate culture. Recruiters also must be able work hand in hand with IT managers to screen and assess candidates and to make competitive employment offers that get results. This report examines the strategies, resources, and tools used by recruiters at best-practice companies to get the results their businesses need to stay competitive.

IT TALENT: THE FISH THAT MAY GET AWAY

Retention of IT talent has become an important issue for all organizations, not just technology-based companies. Every organization must be aware that its internal IT staff may be the target of “talent raids” from other companies and that professional recruiters and/or other companies may contact its employees to showcase the “greener grass” elsewhere. Even in companies that keep abreast of their competition, job tenure has declined as people continue to move from project to project rather than stay with one company. Employees are especially prone to job-hop in locations where start-up companies and/or technology giants compete for IT talent. Start-ups may offer new jobs with the added lure of stock options, while well-established technology companies offer relative job stability and project variety. In Silicon Valley, a turnover rate for IT professionals of 15–20 percent annually is not considered out of bounds. In some cases, turnover exceeds 30 percent.

Best-practice companies participating in this study deliberately make staying put the most attractive option for their IT staffs. They begin by proactively benchmarking salaries and benefits to keep their compensation offerings competitive. Although employees rarely join a new organization simply for more money, a non-competitive compensation package from their current employer can leave the door open for an employee who might consider leaving. This study found that welcoming new hires with thorough assimilation and orientation programs is another key to successful employee retention. These programs should prepare employees as much as possible for their new jobs, familiarize them with the corporate culture, and introduce them to co-workers. An effective orientation shows that the company cares enough to look after new employees during transition, helps employees build loyalty to the company, and creates a sense of belonging for them.

Successful companies also work to define fulfilling careers for employees and help them map out a long-term strategy to achieve their professional goals. Employees too often are left unguided without any real idea of how they can achieve certain levels of expertise or responsibility within the organization. Best-practice organizations improve their retention rates and the morale of the entire organization by recognizing employee and team achievement of goals through formal and informal rewards. Offering this recognition is not necessarily expensive, but it can be like gold for hardworking IT staff members.

KEY FINDINGS OVERVIEW

The key findings of this study are taken from primary research performed via five site visits to best-practice organizations, one visit hosted by a sponsor organization, and a detailed questionnaire. Based on the Recruiting and Retaining IT Talent scope, findings are supported with data gathered from 17 study participants (partner and sponsor organizations). The findings, which are organized into four sections, address the following dimensions of our learnings:
- recruiting strategy,
- needs assessment and sourcing,
- recruitment and selection processes, and
- retention.

I. Recruiting Strategy
II. Needs Assessment and Sourcing
III. Recruitment and Selection Processes
IV. Retention

METHODOLOGY

Benchmarking is the process of identifying, understanding, and adapting outstanding practices from organizations anywhere in the world to help an organization improve its performance. Companies participating in
benchmarking activities report breakthrough improvements due to direct and indirect improvements in cost control, quality, cycle time, and profits.1
Recognized as first among a list of 10 leading benchmarking organizations’ models by the European Center for Total Quality Management in 1995, the APQC consortium methodology, developed in 1993, serves as one of the premier methods for successful benchmarking in the world. The APQC project team conducted the Recruiting and Retaining IT Talent study using its established benchmarking methodology, as described here.

Phase 1: Planning
Phase 2: Collecting
Phase 3: Analyzing and Reporting
Phase 4: Adapting

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- Sponsor and Partner Organizations

A listing of the sponsor organizations in this study, as well as the best-practice (“partner”) organizations that were benchmarked for their innovation and advancement in recruiting and retaining information technology talent.

- Executive Summary

A bird’s-eye view of the study, presenting the key findings discovered and the methodology used throughout the course of the study. The findings are explored in detail in following sections.

- Comparison of Participant Groups

An introductory examination of various aspects of the study’s sponsor and partner organizations relating to the study topic.

- Key Findings

An in-depth look at the 13 key findings of this study. The findings are supported by quantitative data and qualitative examples of practices employed by the partner organizations.

- Partner Organization Profiles

Background information on the partner organizations, as well as highlights of their recruitment and retention practices.

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